Problem $6\mathrm{.}4$

Currently, the spot exchange rate is $$\frac{0\mathrm{.}83}{A}$$ and the one$-$year forward exchange rate is $$\frac{0\mathrm{.}79}{A}$$$.$ One$-$year interest is $3\mathrm{.}5\%$ in the United States and $4\mathrm{.}2\%$ in Australia. You may borrow up to $$1,000,000$ or $A$$$1,204,819,$ which is equivalent to $$1,000,000$ at the current spot rate.

Determine if IRP is holding between Australia and the United States.

Yes

No